Skyhorse Publishing: From Zero to $40 Million in 10 Years

When Tony Lyons was looking to raise money to start a new publishing company in 2006, he knew that some investors were wary of his plan to publish a large number of books in a wide variety of categories rather than focusing on a few niche areas. But Lyons was committed to that approach, and 10 years after he formed Skyhorse Publishing, the company has a backlist of 6,000 books and posted revenue of more than $43 million in 2015.

In an interview in Skyhorse’s new 11th-floor offices on West 36 Street in New York City, Lyons said the decision to opt for a broad publishing strategy was both a personal and a strategic one. “I have a wide scope of interests, and I didn’t think it would be as much fun to publish books in a limited range,” Lyons said. In addition, publishing a large number of titles gave Lyons the best chance to build the critical mass that he believes an independent press needs to survive. His original goal was to have $5 million in revenue before the end of year three, a target he hit.

One advantage of publishing in a broad number of areas, Lyons said, is that you can get authors who are well-known for a certain type of book to write in other areas where they have a particular interest. That was the case for former pro wrestler and Minnesota governor Jesse Ventura, who has written six books for Skyhorse, with his newest, Jesse Ventura’s Marijuana Manifesto, out this month. His first book, a memoir, has sold more than 45,000 copies.

Having editors with experience in a wide variety of areas also helps Skyhorse move quickly and adapt to new trends and hot categories. The publisher had done little with adult coloring books before 2015, when the category started exploding, but Skyhorse has sold more than 4 million copies since it released its first adult coloring book in May last year. Similarly, its Sky Pony Press children’s imprint jumped on the Minecraft craze early and has had big hits with Invasion of the Overworld (405,000 copies sold), Quest for the Diamond Sword (355,000 copies sold), and Hacks for Minecrafters (292,000 copies sold).

As much as Lyons likes to encourage his editors to explore different areas, Lyons found during the company’s expansion—Skyhorse now has 93 people and plans to release 900 books via 14 imprints in 2017—that he needed to bring more structure to the business to ensure the different editorial teams were not working at cross-purposes. That led him to hire industry veteran Mark Gompertz as group editorial director in 2015. More recently, Skyhorse created six editorial divisions (or “pods”) in which Lyons has given editorial directors responsibility over distinct areas. Gompertz, who had spent a number of years at Touchstone/Fireside before working with books at Hearst, said another benefit of the system is that it enables Skyhorse to build communities around different categories.

One of Skyhorse’s editorial directors is Abigail Gehring, who was also one of Skyhorse’s first employees. In addition to being editorial director for cooking and lifestyle, Gehring is Skyhorse’s associate publisher and became the company’s first employee to establish a satellite office, when she opened an office in Brattleboro, Vt., allowing her to stop commuting to New York from her Vermont home.

Gehring’s division publishes 160 to 200 books annually, and she is currently overseeing an update of its Fix-It and Forget-It cookbook franchise. Skyhorse acquired the Fix-It line in 2014 when it bought the assets of Good Books as part of a bankruptcy auction. Originally written by Phyllis Good, the series is now being done by Hope Comerford, who still uses Good’s system of collecting slow-cooking recipes from home cooks. Comerford’s first book, Fix-It and Forget-It Lazy and Slow Cookbook, will be published in January. As well as overseeing the transition from Good to Comerford, Gehring has upgraded the look of the series, adding color throughout the books, using better bindings, and including QR codes that make it easy to download the shopping list needed to make a recipe. “We want to give new life to the series,” she said.

The purchase of the Good assets was just one acquisition that Lyons used to build the company. In 2010, he made three purchases, including Arcade Publishing, which had also filed for bankruptcy. Founded by Richard and Jeanette Seaver, Arcade added a respected literary fiction component to Skyhorse.

Though acquisitions have played an important role in growing Skyhorse, Lyons has not made a purchase since the Good Books deal late in 2014, instead focusing on developing new imprints. One of those new imprints is Hot Books, which is being overseen by Salon founder David Talbot and whose mission is to release books on current events. Lyons acknowledged that it took a little while for Hot Books, which was started last year, to hit its stride, but Lyons thinks the imprint has found the right formula now. He has high hopes for The Gilded Rage by freelance journalist Alexander Zaitchik, who followed Republican presidential candidate Donald Trump on the campaign trail for six months; the book was released by Skyhorse on August 16.

Given Skyhorse’s rapid growth, it may be a bit of a surprise that Lyons said he is not interested in “growth for growth’s sake.” He believes that Skyhorse is at a good size currently, one that lets it take advantage of its scale while still remaining flexible and able to respond to new opportunities quickly. The company is large enough, Lyons said, that when it needs to get its vendors to move quickly on a particular project, it has the clout to get them to respond. Its large catalogue also enables Skyhorse to have its own special sales force (Perseus Distribution distributes its titles to the general trade), and sales through nontraditional channels account for 40% to 45% of all revenue.

Despite all the resources Skyhorse has amassed 10 years after its launch, Lyons has no interest in changing his model to try to compete with the largest of New York’s trade houses. He is quite happy to pay modest advances for books that may sell 3,000 or 4,000 copies in a particular niche, but which also have the potential to have a long run in backlist. Backlist sales now represent about 60% of total revenue. Though Skyhorse has published many books that have sold more than 100,000 copies, Lyons said he considers a good sale for a typical Skyhorse book to be around 20,000 copies.

Flexibility is also a key part of the business model. Bill Wolfsthal, Skyhorse v-p and executive director of sales and marketing, noted that Arcade had signed a manuscript by Elizabeth Cobbs on Alexander Hamilton in spring 2015, before the musical Hamilton grew into a full-fledged phenomenon. As the novel was getting prepared for publication, Skyhorse decided to change the cover to better capture some of the musical’s vibe. The company moved the release date from September to early August; since then, The Hamilton Affair has sold about 9,000 copies, according to BookScan, out of a 50,000-copy first printing.

Lyons said another important factor in Skyhorse’s ability to grow in a difficult business environment has been the dedication of his staff. Skyhorse still operates very much in startup mode, something that may not appeal to everyone. Skyhorse, Lyons explained, “is the focus of much of my life. I am in this for the very long term.”

Skyhorse Publishing Editorial “Pods”